8-KMaterial AgreementsOther EventsExhibits & Filings

VERIZON COMMUNICATIONS INC 8-K Report, Material Agreement (Apr 11, 2005)

Filed April 11, 2005For Securities:VZ

Summary

Verizon Communications Inc. (VZ) has announced a significant agreement to acquire approximately 43.4 million shares of MCI, Inc. (MCI) common stock from entities affiliated with Carlos Slim Helu. The purchase price is set at $25.72 per share in cash, totaling an initial outlay of over $1.1 billion. This acquisition is a key step towards Verizon's proposed merger with MCI. The transaction is contingent upon standard closing conditions, including regulatory approvals like the expiration of the Hart-Scott-Rodino waiting period, and the absence of any prohibiting laws or orders. An intriguing aspect of the deal includes a potential price adjustment at the end of one year, tied to Verizon's stock performance exceeding a specific threshold, indicating Verizon's confidence in its own valuation while also providing a potential upside for the sellers.

Key Highlights

  • 1Verizon agrees to purchase approximately 43.4 million shares of MCI common stock for $25.72 per share in cash.
  • 2The total cash consideration for these shares is over $1.1 billion.
  • 3This stock purchase is a definitive agreement paving the way for Verizon's proposed merger with MCI.
  • 4The transaction is subject to customary closing conditions, including regulatory approvals (e.g., Hart-Scott-Rodino).
  • 5Sellers of MCI shares have agreed not to impede the merger process and to support the transaction.
  • 6A potential one-year price adjustment clause is included, based on Verizon's common stock price performance relative to $35.52.

Frequently Asked Questions

This 8-K filing announces Verizon Communications Inc.'s entry into a material definitive agreement to acquire a significant stake in MCI, Inc. (MCI) stock from specific sellers, which is a step towards Verizon's larger proposed merger with MCI.

Verizon is acquiring approximately 43,447,684 shares of MCI common stock at a price of $25.72 per share in cash.

Yes, the closing is subject to customary conditions such as regulatory approvals. Additionally, there is a provision for a price adjustment at the end of one year, calculated as 0.7241 times the amount by which Verizon's common stock price exceeds $35.52 over a 20-day period.

This stock purchase agreement is a crucial step in facilitating Verizon's previously announced merger agreement with MCI. The sellers of the MCI shares are also agreeing to support the merger transaction.